The SA Taxi Holdings’ SA Taxi Development Finance Proprietary Limited, has received $100 million from AfDB to empower taxi operators with limited access to finance from traditional financiers.
SA Taxi‘s financial package, comprising a senior loan of $10 million and an associated facility of ZAR 1.4 billion (about $97 million), will provide a powerful boost to industrialization through improved urban mobility for working class South Africans.
According to Lorenzo Cardoso, Chief Financial Officer and Director of SA Taxi, “The funding transaction entered into with the African Development Bank is instrumental to the firm’s medium and long term strategy and empower SMEs and create opportunities that ensure the sustainability of the minibus taxi industry.”
SA Taxi is a vertically integrated minibus taxi platform utilizing specialist capabilities, enriched proprietary data and technology, to provide developmental finance, insurance and other services to empower Small and Medium Enterprises (SMEs), thus enabling the sustainability of the minibus taxi industry.
In addition to minibus vehicle retail and financing services, the firm also provides specialized minibus taxi insurance, vehicle tracking, maintenance, and refurbishment services to taxi operators through SA Taxi Auto Repairs and SA Taxi Protect, its wholly-owned subsidiaries.
While approximately 80% of SA Taxi clients are unbanked and may not ordinarily qualify for the formal banking sector, under the Bank’s financing arrangement, approximately 25% of direct beneficiaries will continue to be women and approximately 22 % will be youth under 35 years old.
The Bank’s Director of Infrastructure & Urban Development Amadou Oumarou, said the move partnership would bring real and tangible benefits to the people of South Africa with the prospect of scaling up this model to other African countries that are facing significant urban public transportation challenges.
“The evolving public transportation systems with para-transit minibuses filling the market segment between private taxis and municipal bus transit, is key to achieving South Africa’s economic success and social progress,” Oumarou, said. “Therefore, the Bank is proud to be supporting the SA Taxi Group in its pioneering efforts to positively shape the ecosystem of public transportation services in South Africa.”
Up to 90 % of vehicles financed by the firm manufactured in South Africa, a powerful boost to industrialization. This makes the loan facility consistent with the Bank’s Ten-Year Strategy (2013 – 2022) and Country Strategy Paper for South Africa 2018-2022, as well as two of its High 5 priorities: Industrialize Africa and Improve the Quality of Life for the People of Africa.
The Bank’s funding will ultimately support SA Taxi’s continued investment in the taxi industry and its strategy of enabling taxi operators to replace old vehicles with newer, safer and lower emission minibus taxis.